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Journal Article

Under Pressure: Economic Constraints, Electoral Politics and Labour Market Reforms in Southern Europe in the Decade of the Great Recession


Bulfone,  Fabio
Politische Ökonomie der europäischen Integration, MPI for the Study of Societies, Max Planck Society;


Tassinari,  Arianna
Politische Ökonomie von Wachstumsmodellen, MPI for the Study of Societies, Max Planck Society;
Department of Social and Political Sciences, European University Institute, Italy;

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Bulfone, F., & Tassinari, A. (2021). Under Pressure: Economic Constraints, Electoral Politics and Labour Market Reforms in Southern Europe in the Decade of the Great Recession. European Journal of Political Research, 60(3), 509-538. doi:10.1111/1475-6765.12414.

Cite as: https://hdl.handle.net/21.11116/0000-0006-E327-E
Even when subject to comparable exogenous constraints during the Eurozone crisis and in its immediate aftermath, governments in Southern Europe have pursued distinct labour market reform agendas. What room for manoeuvre did governments of crisis-struck peripheral countries really have in shaping their labour market reform strategies, and how can we account for the observed variation? We address these questions by making a twofold contribution to the debate on the political economy of austerity in the Eurozone periphery. First, through the first systematic analysis of all labour market and collective bargaining (CB) reforms implemented in Portugal, Spain, Italy and Greece over 2009–2019, we identify those elements of core labour market deregulation common across SouthernEuropeancountries(namely,thelooseningofemploymentprotectionforworkersonopen-endedcontracts and the decentralisation of CB to the firm level); and those elements of variation, both cross-country and crossparty, in the content of corollary labour market interventions that accompanied this core deregulation. Second, we explain these similarities and variations in reform outcomes as the product of the interaction of two factors: economicconstraintsandelectoraldynamics.Wearguethattheimplementationofthecommoncoreofderegulation is linked to the exogenous pressure to improve export competitiveness to which Southern European countries have been subjected since the crisis. Through the combination of survey data analysis and qualitative evidence, we then show empirically how the variation in the corollary measures accompanying deregulation is linked to the class compositionoftheelectoralsocialblocsSouthernEuropeanpartisangovernmentsrelyonoraimtoassemble.Based on this analysis, we identify four ideal-typical labour market reformist strategies attempted by Southern European governmentsduringthedecadeoftheGreatRecession.Theanalysishighlightsthatalthoughdomesticpoliticsplays a crucial role in shaping structural adjustment under crisis conditions, not all reform strategies are equally viable within the framework of Economic and Monetary Union.